Uzoma Dozie, Chief Executive Officer Diamond Bank Plc
October 26, 2018
By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s lender, Diamond Bank Plc has continued to erode investors value, it announced on Friday its post-tax profit for the period ended September 30, 2018 plunged 57.6 percent to N1.65 billion from N3.90 billion recorded a year ago.
Similarly, pretax profit of the bank declined 35.4 percent to N3.08 billion from N4.78 billion posted the same period of 2017.
Gross earnings for the group dropped to N142 in the review period of 2018 from N143 billion in 2017, indicating a depreciation of 0.77 percent.
Still on the declining streak of the bank is the interest income which plunged 4.0 percent to N107.99 billion from N112.53 declared the same period of 2017, Diamond Bank said in a filing with the Nigerian Stock Exchange (NSE).
A further analysis of the review period shows that earnings per share (EPS) also depreciated drastically 58.8 percent to N7.00 per share from N17.00 recorded the corresponding period of 2017.
Shares of Diamond Bank at the close of the Friday’s trading session on the Nigerian bourse dropped 3.36 percent to N1.44 per share from N1.49 traded the previous session as investors lost 0.05 kobo per share.
In an emailed statement from the lender to InvestAdvocate, Diamond Bank said customers deposit dropped by 8.0 percent year-on year to N1,107 billion due to re-pricing and non-rollover of high priced maturing deposits, and migration to government securities while Liquidity position remains strong as current and savings account balances increased from 77.4 percent (FY2017) to 78.08 percent of total deposits in September 2018.
“The global economy is currently witnessing a shift in trade relations alongside continued interest rate adjustments. This has led to greater volatility across markets and increasingly fragile economies. Nigeria’s economy has not been immune to certain headwinds, so that while the economy recorded quarters of expansion, the rate of growth has weakened. However, against this backdrop, our digital-led retail strategy has remained robust. Through this strategy we have been able to continue scaling up by reaching a wide pool of customers both cost effectively and efficiently. As a result of our network and digital infrastructure, during Q3 we reached the N1 billion mark in total loans disbursed to small and medium enterprises (SMEs). Alongside this, we introduced the SMEzone, a platform targeted at keeping entrepreneurs well positioned for competitiveness through community and continuous learning. We are investing more in businesses in the middle market because we see entrepreneurs as a key driving force for economic growth. This focus is in line with and supportive of our own recovery and return to profitability.
As we move into the final quarter of the year, we expect headwinds to continue driven by emerging situations in developed economies as well as our domestic political realities. Despite this, our investors can expect a further decline in non-performing loans (NPLs), a further increase in our digital footprint and completion of the sale of the UK subsidiary. Through these actions we remain optimistic about the medium to long term outlook of Diamond Bank and its return to strong profitability.” the statement quoted Uzoma Dozie, chief executive officer (CEO) of the bank as saying while commenting on the business.
The Bank noted in the statement it has a strong focus on the Nigerian market, especially the retail sector through its technology led retail strategy to drive growth and position SMEs for competitiveness.
According to the statement, its retail strategy is quite rewarding as it has recorded a landmark figure in the value of funds disbursement of over N1 billion to small business owners under the cash flow-based SME lending scheme in partnership with the Women’s World Banking (WWB), which it noted has earned it the leading financial institution ranked among the first five SME customer bank in Nigeria in the KPMG customer service survey 2018.